HOUSTON — Two waiters for Montrose Restaurant in Texas sued their employer claiming that the restaurant wrongfully included a so-called “coffeeman” in the restaurant tip pool in violation of the Fair Labor Standards Act (FLSA). The “coffeeman” apparently worked behind the scenes making coffee and occasionally would bring bread and food into the dining room. The plaintiffs sued, reasoning that they should not be forced to share with workers who do not customarily receive tips. The district court on summary judgment ruled that the coffeeman’s inclusion in the tip pool was permitted under FLSA, but the United States Court of Appeals for the Fifth Circuit reversed that decision, stating that whether the coffeeman should be in the tip pool is a fact-specific analysis that should not have been decided on summary judgment.
FLSA and Tip Pools
FLSA allows employers to claim a tip credit towards meeting the minimum wage requirement for any employees in a properly-created tip pool equal to the difference between the required cash wage (at least $2.13) and the federal minimum wage ($7.25). Thus, the maximum tip credit that an employer can claim under the current minimum wage is $5.12 per hour.
Tipped employees are those who customarily and regularly receive more than $30 per month in tips. Only these employees can be part of a tip pool – if even a single employee who does not customarily and regularly receive tips is included, it may invalidate the entire tip pool. If a tip pool is constituted, then it must notify tipped employees of any required tip pool contribution amount and may only take a tip credit for the amount of tips each tipped employee ultimately receives.
Fifth Circuit’s Tip Pool Analysis
According the court in this case, merely including someone in the tip pool is not enough to satisfy FLSA’s requirement that he or she customarily and regularly received tips. The most important question is whether the customer who leaves the tip would have intended for the employee to receive a portion of the tip. Therefore, one of the factors in this determination is whether the employee, in this case the coffeeman, had more than a minimal interaction with the customers who leave the tips and whether he or she is engaging in customer service functions. Any attempt to rely on mere job title or the designation of being a “front of the house” or “back of the house” employee is insufficient because these labels are easy to change and cannot determine whether the employee “customarily and regularly receives tips.”
Whether or not an employee should be part of the tip pool is a complex question that requires employers to look closely at the duties of each employee. You should call (855) 754-2795 or complete the Free Unpaid Overtime Case Review form on the top right of this page if you or a loved one suspects that a tip pool of which you are a part of is invalid because the employer improperly included certain employees. Our top-rated team of wage lawyers will evaluate your situation to determine your best course of action. We will also determine if it is in your best interest to file a lawsuit against your employer. There are strict time limitations for filing, so it is important that you call our experienced attorneys today.